Pizza Today - March 2022 - 42

Food Cost: Vendor
Allowances
There are two methods to
receiving a discount on the
food you purchase. A 'rebate'
is money given back to you by
the food manufacturer after
you have purchased their food.
This is no longer the preferred
method. Better is a discount
peroni per ounce) and you sold 100 large
pepperoni pizzas, you would know how
much you should have used, aka your
'ideal usage'.
100 x 10.5 ounces / 16 ounces per
pound = 65.63 pounds of mozzarella
55 x 100 / 15 slices per ounce / 16
ounces per pound = 22.92 pounds of
pepperoni
When compared against your actual
usage (beginning inventory + purchases -
ending inventory) you will discover your
over or short on pepperoni and mozzarella.
Food
Cost: Single Vendor Contract
Help me help you. Jerry Maguire said
it best. Simply put, get all your food and
supplies from one vendor. Sign a contract
with this vendor in return for cost-plus
pricing. If your vendor makes a profit,
they can help you to make a profit. Stop
chasing the deal-of-the-week and manage
one vendor. Monitor their pricing
and audit them once per year. Stick with
them for two to three years before asking
for other vendors to bid for your business
as a single vendor provider.
42 / PIZZATODAY.COM / MARCH 2022
applied to the product as you
purchase it. This is known
as a 'vendor allowance'. For
example, the 'street price' for
pepperoni may be over $5.00
per pound. You, or even better,
your new partner the Single
Vendor Provider, contact the
manufacturer directly and ask
for a discount. This may bring
the price down by over $1.00
per pound! By having your
Single Vendor Provider contact
all the manufacturers of all
the products you purchase, you
will save thousands of dollars per year.
Labor Cost: Scheduling
Techniques
Reduction of hours paid is the best
way to control your labor cost. However,
the challenge is to do this while still providing
a level of customer service that is
acceptable to your customers. This means
you are constantly looking at your POS
system to determine your sales for each
half hour of each day and schedule the
appropriate number of bodies to handle
the expected business. Two weapons to
add: schedule by the 15 minutes and
schedule a maximum of 7.5 hours per
shift with maximum 38 hour work weeks.
By scheduling by the 15 minutes
(for example, 5:15 p.m.- 8:45 p.m.) you
will accomplish two things. First, your
employees will realize how important
the timing of their shift is related to
customer service. Second, you will more
efficiently bring bodies to work at the
time the work needs to be done.
We all know that slippage happens.
An employee who should clock out at
8:00 stays until 8:15. If your state requires
paying overtime after eight hours per day
or over 40 hours per week, by scheduling
maximum 7.5 hour shifts and 38 hour
weeks, you will avoid overtime. Paying
an employee time and a half is not an
affordable way to do business.
Labor Cost: Technology
Let's get the customer placing their
own orders. This will reduce the labor
cost needed to take their order. It costs
$1 to $2 per order in labor cost to take
a customer's order. POS systems today
offer kiosks, apps and online ordering
to eliminate this cost. Your ROI (return
on investment) of implementing these
technologies could be less than one year.
The benefits are astounding. Lower labor
costs, higher average tickets, less mistakes
and remakes and better customer service.
Labor Cost: Equipment
Every time minimum wage goes up,
that is our government funding the
purchase of more efficient equipment
for our pizzerias. A $400 cheese grater
attachment on a mixer has worked fine
for 35 years. It takes one hour to grate
90 pounds of cheese. When minimum
wage goes from $10/hour to $15/hour,
the cost of grating cheese per week for an
average pizzeria goes from $70/week to
$105/week. A commercial cheese grater
that can do the job in 30 minutes may
cost $5,000. The ROI on the purchase of
a $5,000 cheese grater is 22 months. That
is a good investment.
Look at all your prep tasks and
research equipment that will do it faster.
Look at your production and do the
same. More efficient equipment will
reduce your labor costs and pay for itself.
You may have experienced seven percent
inflation as a consumer if you are old
enough. But not many of us have experienced
that level of inflation as a business
owner. It will not be over quickly, and you
will not enjoy it. Sorry, sometimes movie
quotes are so apropos that I can't resist.
Fight or perish. These are the weapons
you will need for the fight. n
DAN COLLIER is the founder of Pizza
Man Dan's in California and a speaker at
International Pizza Expo.
http://www.PIZZATODAY.COM
Pizza Today - March 2022

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